Discretionary Spending
Function 600 - Income Security
Change the Share of Income That Tenants Contribute Toward Rent
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
Three housing assistance programs—Housing Choice Voucher, project-based rental assistance, and public housing—together accounted for $36 billion in federal spending in 2014. That spending reflects the government’s cost of providing standard rental housing for assisted tenants, who usually pay 30 percent of their gross family income (after certain adjustments) toward their rent. To reduce federal spending, lawmakers could gradually increase the share of income that tenants contribute toward rent from 30 percent of adjusted household income to 35 percent over a five-year period. Doing so, while holding constant the number of participants, would reduce spending by $22 billion from 2016 through 2025, CBO estimates. Alternatively, lawmakers could increase support for the households participating in those programs by decreasing tenants’ rent contributions from 30 percent to 25 percent, at a cost of $22 billion from 2016 through 2025.